The Story Of How I Bought My First Business: 7upsports

Reading Time: 6 minutes

In October 2019 I (via Michelle Rubini’s Facebook newsfeed) stumbled into a whole new world of micro-private equity.

It turns out that you can actually buy small businesses that are undervalued; improve the business and then scale it.

This simple notion of buying businesses absolutely blew my mind.

And yet it makes total sense right?

Realistically – there are likely thousands of small business owners that are generating an income from £5 to £50,000+ per month that they (for whatever reason) want to sell.

This could be because of:

  • Getting bored/losing interest in the business
  • Struggling to scale the business
  • No time to run/grow the business
  • Distressed sale (need the money for something else)
  • Change in circumstances (retirement, relocation)

Given all the above, you will find there’s an underground (fast becoming overground) market of small business owners looking to sell their companies.

In fact, this has been happening for decades now I expect – probably more.

This can be ANY type of company by the way.

Physical, Digital, hybrid or otherwise.

And when I thought carefully about this idea..it blew my mind.

I always felt that buying a company was the business of private equity guys, fund managers, entrepreneurs and the like.

But when you suddenly have a business that you can purchase that’s accessible to micro-entrepreneurs like me…then amazing.

And as a friend of mine just bought a business for £350k which he financed via a business loan.

He will use the currently existing revenue from the business to pay down the loan (smart)

He’ll do this whilst working the client list he has inherited to see where and how he can get more value from them.

He’s in the long-term investing space (a partner at a financial advisory firm!) and therefore a happy client who puts more money in or makes a referral can mean a significant return for him.

I love the model!

Given I’m a digital marketer this lends itself incredibly well to the digital space.

And this is where I came upon Ryan Kulp and the world of microacquistions (affiliate link) comes in.

This guy has seen some serious success buying companies and I highly recommend you purchase his course if you’re serious about the space.

I now have a guest lecture in the course which you can watch to find out more.

The course is focused on the SaaS space (as is Ryan’s preference).

His model is to identify businesses that are ultimately revenue generating – in absence of strong marketing and product development that can be purchased and developed to see 3-5x returns.

You can identify such businesses on marketplaces such as Flippa, Empire Flippas, 1k Projects and a whole of other websites all accessible via the microacquisitions dealflow site (or you can just google it).

Crazy.

I’m sure by now you’re Googling all of this and looking further into this space – and I absolutely commend you if you do.

To get the 20-minute video on the whole business buying process I went through just purchase Ryan’s course :p

But yes – to get to 7upsports the media site I’ve bought,

  1. It has 1100 blog posts.
  2. Is in Google News.
  3. Regularly gets 30k+ page views per month.
  4. Has tons of #1 rankings/positions
  5. Made $240+ a month before purchasing the business

And is a business I paid LESS than $1000 to buy.

Yup.

Less than $1,000.

I want to walk you through at a high level the whole acquisition process and what I took from Ryan’s course and combined with some more advice I got from Craig Campbell – an SEO expert I happen to have good banter with.

Let’s begin:

Ryan’s focus is on SaaS – which makes total sense as he is a (self-taught) developer by background.

My background is in…SEO as you know – so I am naturally more/interested in affiliate/media sites that are in need of traffic.

Ryan can develop; I (in theory) can drive traffic via Google search.

The other element that I took from Ryan’s course was that sites listed on broker platforms will fundamentally (depending upon the platform) cost more.

This is because (much like an estate agent) – if someone is on a brokerage platform – the end game is to extract as much value as you can from that business on either side of the negotiation.

Even by listing your business on a brokerage platform, it puts you into the mindset of thinking –

‘How much is my business worth?’

‘How much could I sell it for?’

And correspondingly you’ll check revenue, work involved, the potential for growth and everything else that comes with it.

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In this way, platforms such as Empire Flippers and Flippa alongside any other popular platform similar to these (I’m sure there are many if you just Google it) are geared towards increasing valuations.

From Ryan’s course as this space becomes mainstream – we’re beginning to see valuations increase from selling at 1.8-2x annual revenue to maybe 2-2.4x – which is what he’s seen over the last couple of years.

So now let’s switch to advise from Craig Campbell – an influencer of some repute in the SEO space.

We’re friends – and I reached out to him for advice. He opened my eyes to the other platform I’d not duly considered in my hunt to buy small businesses:

Facebook!

Facebook groups are absolutely huge – if you’re a marketer or entrepreneur you’re probably part of ten or more different groups yourself.

And with this in mind, there are marketplaces here that are absolutely the wild wild west when it comes to finding businesses that are looking to be sold and sold fast.

Just as Flippa is considered to be the eBay of the business-buying world – Facebook groups are definitely the silk road with both treasure and trash.

And it was in the SEO Marketplace group that I found treasure via Salahuddin (a 25-year-old Bangladeshi blogger) who was doing his damnedest to offload 7upsports.

Which bucket do you think he fell into?

It was a distressed sale.

He was a student desperately in need of income to help pay for his student fees and 7upsports was an adventure he embarked upon to see if he could get a site into:

  • Google news
  • Generating AdSense income

He was successful and was able to demonstrate that he had a < 6-month-old site that had generated around $250 in Adsense income.

Fundamentally after running due diligence – he gave me logins to the site, histats (the tool he used to track page views etc), showed me his verified Adsense earnings and walked me through the business.

I ultimately brokered a deal where Salahuddin would keep working via a salary on the company as a contractor to the business which also has a 25% revenue share.

That way he had enough money ($400 a month) to not worry about his student fees as well as enough income to keep writing five-eight blogs per day (I kid you not).

In terms of the formal structure of the business – there were:

No legal documentation, nothing signed – money wired via Skrill and Salahuddin and we continue to grow the business together in search of hitting $1-2k per month.

Every deal is different – and depending upon the actual deal size in some cases (or the seller type) – there’s no need to bother with formal documentation.

And ultimately this is the story of how I bought my first business – but within this, there are of course the ‘growth elements to consider.

What is the plan for growth:

Well – since we started the business we hit £75 in our first month via AdSense but are now adapting the business by doing these things:

  1. Switching from AdSense to Ezoic because it gives better returns (this didn’t work in the end)
  2. Adding Amazon affiliate links to the website (this is ongoing)
  3. Offering paid guest posts
  4. Add other relevant affiliate links where possible
  5. Build an email list

We’ll now see if using these methods (including running SEO to grow the site) can grow the site to a place where it generates 4 figures a month.

The challenges of this site are that it’s a media/news site so requires constant content writing and we’re also considering what should be the keywords of focus.

It may well be the case that this website doesn’t take me anywhere – but the primary principle of this journey is to understand what is involved in buying a business – and to a large degree now I know.

With all of this in mind – there are some additional elements which proved powerful in the buying of this business:

  1. Being Indian is very useful when hiring/buying things from South Asia – people assume I’m an Indian from India or that ‘I know the pricing’ – so I tend to get closer to true market value
  2. Energy and enthusiasm counted for so much during this deal as when people like and trust you….everything is easier – and much of that simply comes from your energy

So this was the story of how I bought my first business.

In the next email I’ll switch gears and will discuss the story of how I met my best friend – see you then 😛

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